Correlation Between Petroleo Brasileiro and Access Flex

Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Access Flex at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Petroleo Brasileiro and Access Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Access Flex Bear, you can compare the effects of market volatilities on Petroleo Brasileiro and Access Flex and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Petroleo Brasileiro with a short position of Access Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Access Flex.

Diversification Opportunities for Petroleo Brasileiro and Access Flex

-0.48

Correlation Coefficient

Petroleo Brasileiro  Access Flex

Very good diversification

The 3 months correlation between Petroleo and Access is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Access Flex Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Flex Bear and Petroleo Brasileiro is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Petroleo Brasileiro Petrobras are associated (or correlated) with Access Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Flex Bear has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Access Flex go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Access Flex

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 5.7 times more return on investment than Access Flex. However, Petroleo Brasileiro is 5.7 times more volatile than Access Flex Bear. It trades about 0.06 of its potential returns per unit of risk. Access Flex Bear is currently generating about 0.11 per unit of risk. If you would invest  1,324  in Petroleo Brasileiro Petrobras on October 13, 2024 and sell it today you would earn a total of  24.00  from holding Petroleo Brasileiro Petrobras or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Access Flex Bear

Petroleo Brasileiro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petroleo Brasileiro Petrobras has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Petroleo Brasileiro is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Access Flex Bear

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Access Flex Bear are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Access Flex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Petroleo Brasileiro and Access Flex

The main advantage of trading using opposite Petroleo Brasileiro and Access Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Access Flex can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Access Flex will offset losses from the drop in Access Flex's long position.

The idea behind Petroleo Brasileiro Petrobras and Access Flex Bear pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.